The consultation will run until September 10.
Ireland has expressed broad support for the agreement on Pillar Two but noted reservation about the proposal for a global minimum effective tax rate of at least 15 percent.
Earlier this month, the OECD Inclusive Framework reached agreement on the key aspects of the two-pillar solution to address tax challenges arising from the digitalisation of the economy.
Pillar One proposes a re-allocation of a proportion of tax to the market jurisdiction, while Pillar Two seeks to apply a global minimum effective tax rate.
According to a July 1 press release by the Government, Ireland is not in a position to join the Pillar Two consensus.
“There is much to finalise before a comprehensive agreement is reached in October. Ireland will constructively engage in these further discussions and technical work over the coming months,” the release states.
Finance Minister Paschal Donohoe said: “I was not in a position to join the consensus on the agreement and specifically a global minimum effective tax rate of at least 15 percent today. I have expressed Ireland’s reservation, but remain committed to the process and aim to find an outcome that Ireland can yet support. Ireland will continue to play our part in reaching a comprehensive and, indeed, historic agreement.”
Ireland consulting on international tax reform
On July 20, 2021, Ireland launched a public consultation on key aspects of the two-pillar solution to address tax challenges arising from digitalisation and globalisation.
Earlier this month, the OECD Inclusive Framework reached agreement but not unanimous consensus on key aspects of the tax reform.
Ireland has been clear in expressing our broad support for the agreement but have expressed our reservation about the proposed global minimum effective tax rate of at least 15 percent. The consultation will identify the challenges and opportunities of the proposals in respect of Ireland’s corporate tax code and broader industrial policy.
Finance Minister Paschal Donohoe said: “I believe it is in the interest of all concerned to achieve an equitable, ambitious and sustainable agreement at the OECD on the international tax architecture. It is essential as we emerge from the Covid-19 pandemic that the international tax system provides the necessary certainty and stability to support growth and investment, and Ireland is committed to playing our part in reaching the comprehensive agreement.”
“I am committed to ensuring that Ireland’s tax policy continues to support economic growth and prosperity, and in this respect, I would welcome the views of the public and key stakeholders on the key aspects of the OECD proposals.”
The consultation will run until September 10.
The author is Alex Hunter, Editor, TP News. He oversees and updates the publication and also regularly writes news stories about transfer pricing and international tax law. Alex is reachable at editor@transferpricingnews.com